What happens when the annual coupon rate is increased

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Perform instant experiments on whether changing various inputs causes an increase or decrease in the Bond Duration and by how much.

(A) What happens when the annual coupon rate is increased?

(B) What happens when the yield to maturity is increased?

(C) What happens when the number of payments / year is increased?

(D) What happens when the annual coupon rate is decreased to zero?

(E) What is the relationship between the duration of a zero coupon bond and time to maturity?

(F) Does an increase in the time to maturity always increase the duration of a coupon bond or is it possible for it to decrease duration at some point? Asked differently, does the duration curve always go up or can it be hump shaped?

Reference no: EM132794169

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